Smith v. Transport Workers Union, Air Transport Local 556

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS July 6, 2004
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk

04-10230
Summary Calendar

MELISSA E. SMITH,

Plaintiff-Appellant,
VERSUS

TRANSPORT WORKERS UNION OF AMERICA, AFL-CIO
AIR TRANSPORT LOCAL 556,

Defendant-Appellee.

Appeal from the United States District Court
For the Northern District of Texas

Before SMITH, DUHÉ, and WIENER, Circuit Judges.

PER CURIAM:

Plaintiff-Appellant Melissa Smith appeals a district court

order vacating a modification of an arbitration award. Defendant-

Appellee Transport Workers Union Local 556 argued to the district

court that the arbitration panel lacked authority to modify the

initial arbitration award after three business days, the period

specified in the arbitration agreement for amendment to an award.

Agreeing with the Union, the district court vacated the arbitration

award as modified and confirmed only the initial award. Smith

appeals. Because the arbitration agreement clearly restricts the

authority of the arbitrators to amend or correct their award, we
affirm.

I.

Smith, former president of the Union, initially sued the Union

about matters no longer pertinent in this appeal. The issue

presently before us arose after the parties agreed to stay

litigation and submit to binding arbitration, and indeed after an

initial arbitral award in favor of Smith. Questions about taxation

of additional costs and the arbitration panel’s authority to modify

its initial award gave rise to this controversy. The arbitral

panel determined that it had such authority and modified the award

to tax additional costs against the Union, favoring Smith.

In district court Smith moved to confirm the modified award

and the Union opposed confirmation of the award as modified, but

not the original award. The district court agreed with the Union

and vacated the modified award, confirming only the original

award.1

Our review of the district court's confirmation or vacatur of

an arbitrator's award is de novo; our review of the arbitrator's

award itself, however, is very deferential.2

Whether a contract requires arbitration of a given dispute is

a matter of contract interpretation and a question of law for the

1
R. 177.
2
Gulf Coast Indus. Workers Union v. Exxon Co., USA, 70 F.3d
847, 850 (5th Cir. 1995); Gateway Techs., Inc. v. MCI Telecomms.
Corp., 64 F.3d 993, 996 (5th Cir. 1995); Executone Info. Sys., Inc.
v. Davis, 26 F.3d 1314, 1320 (5th Cir. 1994).

2
court.3 The arbitration agreement states that, “The arbitrators

sua sponte may amend or correct their award within three business

days after the award, but the parties shall not have a right to

seek correction of the award.”4

More than a month after the initial award, the arbitration

panel found a modification to be “consistent with the arbitration

agreement of the parties and the intention of the drafter of the

award.”5 Smith argues that the district court should accept the

arbitration panel’s interpretation because it was based on evidence

that was not before the district court. She contends that, without

a transcript of the arbitration proceedings, we must presume the

evidence was adequate to support the award. While Smith asks us to

defer to the panel, we view the real question as a matter of

contract interpretation and one for the courts, since it involves

the question of the arbitrators’ authority.6

Arbitration is a matter of contract; a party cannot be

required to submit to arbitration unless it agreed in advance that

3
AT & T Techs., Inc. v. Communications Workers of America, 475
U.S. 643, 649, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648 (1986); see
also Babcock & Wilcox Co. v. PMAC, Ltd., 863 S.W.2d 225, 229-30
(Tex. App. — Houston [14th Dist.], 1993, writ denied) (citing AT &
T).
4
R. 154.
5
R. 124.
6
AT&T, 470 U.S. at 649; Babcock, 863 S.W.2d at 230.

3
the dispute would be arbitrated.7 Although the law imposes a

presumption in favor of arbitrability, the policy that favors

resolving doubts in favor of arbitration “cannot serve to stretch

a contractual clause beyond the scope intended by the parties or

authorize an arbiter to disregard or modify the plain and

unambiguous provisions of the agreement.”8

The plain wording of the arbitration agreement contemplates

that the arbitrators will not consider correcting the arbitral

award at all at the behest of the parties, and forbids a correction

or amendment on the arbitrators own motion more than three business

days after the award. We conclude that the modification made was

beyond the reach of the arbitrators’ power. If an arbitral panel

exceeds its authority, it provides grounds for a court to vacate

that aspect of its decision.9

II.

As a second ground to reverse, Smith points to the Union’s

7
United Steelworkers of America v. Warrior & Gulf Navigation
Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1352-53, 4 L.Ed.2d 1409
(1960).
8
Babcock, 863 S.W.2d at 230.
9
The Texas Arbitration Act (applicable under the contract, R.
154) provides that a court shall vacate an award if the arbitrators
exceeded their powers. Tex. Civ. Prac. & Rem. Code
§ 171.088(a)(3)(A). The same is true under federal law. 9
U.S.C.A. § 10(a)(4) (district court “may make an order vacating the
award . . . where the arbitrators exceeded their powers”);
Container Prods., Inc. v. United Steelworkers of America, and its
Local 5651, 873 F.2d 818, 820 (5th Cir. 1989) (“[V]acation or
modification of an arbitration award is clearly proper where the
arbitrator has exceeded his authority.”)

4
contractual limitation on its right of appeal to “arbitrator

misconduct.” We note, however, that the Union did not appeal the

merits of the arbitral award at all. As discussed above, the Union

lodged its objection to Smith’s request to confirm based on the

power of the arbitrators to modify the award, a question of law for

the court. We do not find that the Union violated its agreement to

waive appeal of certain matters.

III. CONCLUSION

By modifying the original award, the arbitration panel in this

case exceeded the authority granted by the parties’ agreement to

arbitrate. Consequently, we affirm the district court's judgment

vacating the modified award and confirming the original arbitration

award.

AFFIRMED.

5